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Skills shortage impacts most manufacturers

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A shortage of skilled and highly skilled workers in the manufacturing trades is becoming a severe problem that is impacting four out of five American manufacturing companies.

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The skills shortages have created increased overtime, production downtime, revenue losses and other costs that are currently reducing the bottom line by up to 11 percent of net earnings, according to a new study by The Manufacturing Institute in conjunction with Accenture.

The Accenture 2014 Manufacturing Skills and Training Study interviewed executives at 300 U.S. manufacturing companies with average annual revenue of $100 million.

More than half of them plan to increase production by at least 5 percent in coming years, but most see the skills shortage as a handicap to reaching that goal.

With the spread of automation, the manufacturing work force has been reduced through the years. Today, very few unskilled positions are available, the report said. Skilled positions take months of training to achieve competency levels, and some highly skilled positions take years of experience, the report said.

With many companies now having trouble finding qualified candidates for positions, the scenario for the future is even bleaker – particularly taking into account that the average age of manufacturing workers today is 44.

Executives surveyed say they have increased the amount they are spending on training. More than half are spending at least $1,000 per employee overall. One in 10 is spending over $5,000 per employee. More is spent on training new hires than on existing personnel.

Companies are addressing the problem through multi-tiered approaches that range from informal job shadowing to in-depth certification programs.

The Manufacturing Institute and Accenture are addressing the shortages by offering the following key strategies that many leading manufacturers have implemented:

  • Use digital learning Offer remote skills training, allowing employers and employees to make use of self-paced learning.
  • Combine formal and informal training Work with local community colleges as well as high school vocational programs to review curriculum and tailor coursework to real-world needs. Consider sending skilled employees to assist in teaching the courses.
  • Consider a certification approach The Manufacturing Institute and other groups offer certification programs that help employees and their employers to recognize accepted levels of skills.
  • Provide apprenticeship training Allow top-level workers to oversee the training of the next generation of skilled workers.
  • Expand the candidate pool Drop the idea of finding “perfect” candidates with a defined set of skills and look for people with knowledge and motivation who can be developed to do the job.
  • Engage talent early Try to change any negative perceptions that young people may have about manufacturing jobs, and educate high school students and others about career opportunities.

To be successful today and to prepare for the demands of the work force in the future, the study said, manufacturers need to focus now on expanding core processes and programs to address both short-term and long-term employment needs.